Collective bargaining consists of negotiations between an employer and a group of employees in order to determine working conditions. The result of the collective bargaining procedure is a collective agreement. Employees are often represented in bargaining by a trade union or trade union organization. It is a process of negotiation between employee representatives (usually union officials) and the management of an organization to determine working conditions. The agreement reached could cover not only wages, but also hiring practices, layoffs, promotions, working conditions and hours, and benefit programs.
In essence, negotiation allows workers and employers to succeed in voluntary agreement on a good range of topics. Importantly, this bargaining capacity is limited to some extent by the federal and state laws in effect in each country. In this regard, a collective bargaining agreement cannot contractually accomplish what the law prohibits. The effect of collective bargaining also depends on the structure of the market and the degree of competition. With perfect competition in product and labor markets, rising wages above the market equilibrium wage induces unemployment. However, when product market competition is imperfect (i.e., when firms have a point of monopoly or oligopoly power), higher wages might not cause higher unemployment but simply be the result of workers appropriating a share. higher than rents. Furthermore, in imperfectly competitive labor markets, higher bargaining power and higher wage levels can increase employment. This would be the case in the presence of monopsony power, which allows firms to offer wages below the market wage, for example, because workers have limited opportunities to change employers or would incur high costs if they did.
BACKGROUND OF COLLECTIVE BARGAINING
Since negotiation is that the off-shoot of organization activity, it's worthy to trace the origin of the organization 1st. The credit for the organized labour movement in Asian countries goes to N.M. Lokhande, WHO was a mill-hand himself. In 1884, he organized AN agitation in the urban center and ready a note strict limitation of operating hours, a weekly day of the week, compensation for injuries, etc., and in response to those demands, a weekly holiday was truly granted by the mill house owners of the urban center. In fact, in 1890, the urban center Mill hands’ Association was union with Lokhande as chairman, and staff newspaper “Deenabandhu” was started. The organization movement got its momentum at the shut of the planet War I and also the amount of 1918-21 was AN epochal amount within the history of the Indian labour movement. The Madras Labour Union (1918) supported by P.P. Wadia was primary India’s Trade Union. By the year 1920, the organization had emerged on the Indian Scene in the majority of the world to guard the legitimate interests of the operating categories. negotiation formally started in the Twenties within the textile trade in Ahmedabad at the time once the nationalist leader was introducing the thought of arbitration. the negotiation started thanks to the failure of arbitration.
Thereafter, uncountable negotiation agreements were dead particularly once Independence. however, there was very little support for the expansion of this apply since neither British nor freelance India created legal provisions for negotiation. notwithstanding, like several alternative countries, negotiation in Asian countries got some impetus from varied statutory provisions. The organization Act, 1929, the urban center Industrial Relations Act, 1946, the economic Disputes Act, 1947, and also the Madhya Pradesh Industrial Relations Act, 1960 provided machinery for consultation and made up the manner for negotiation.
CURRENT TRENDS OF COLLECTIVE BARGAINING
The negotiation in the Republic of India remained principally suburbanized, i.e., company or unit level negotiation instead of trade level negotiation. however, in few sectors (mainly public sector industries) the trade level negotiation was dominant. However, privatization of the public sector modified the trade level negotiation to company level negotiation. On the opposite hand, thanks to severe formalization of the workforce and retrenchment within the industries, the strength, and power of the trade unions are heavily reduced. The trade unions drew the interests of formal employees. an associate increasing variety of informal employees within the firms presently modified the structure of the workforce in such how that the formal employees became a minority. As a result of varied reasons informal employees couldn't type their own trade unions, and on the opposite hand, they're not drawn by the trade unions of the formal employees. These things resulted during a spurt of personal negotiation.
Advancing of informalization of workforce combined with the personal negotiation really modified the character of the trade unions conjointly. In connected sectors and industrial regions, it regenerates several trade unions (particularly in sectors dominated by informal workers) into legal consultants (pursuing individual cases and charging fees for his or her services) instead of negotiation agents. The declining strength of negotiation is additionally mirrored during a sharply increasing share of profit and a significantly declining wage share (since 2001-02), leading to depressing buying power.
A new wave of workers' struggle for the organization is rising from below by and huge freelance from the central trade unions. this can be typically rising within the formal sector. The staff is realizing by their own experiences that they cannot modify their fate while not organizing themselves in a very organization. In varied cases, the staff doesn't get even the legal advantages like minimum wages, the premium rate of overtime and holidays, and casual leaves. Once the union is made, a minimum of the minimum advantages bonded by law is simply accessible to all or any staff. Actually, massive numbers of informal staff are lawlessly placed within the class of informal, and that they will convert their standing into formal staff solely by organizing themselves in a very organization. On the opposite hand, the industrialists aren't in any respect to settle for trade unions in their factories at any value. Unleashing out of the question suppression on staff and organization leaders once there are efforts to create trade unions in their factories. Even once the trade unions are created, managements aren’t able to acknowledge them and thus deny them house for dialogue.
The growth of an economy depends on the growth of businesses, which in turn depends on its workers and employees. This is only possible in the presence of an environment that allows workers to express their complaints and opinions on matters that directly or indirectly affect their employment. Most often, power is in favor of employers, so it is imperative to find a balance with giving workers equal, if not more, powers. This is where the importance of trade unions comes into play.
Although political interference, the multiplicity of trade unions, lack of unity among unions, low membership, non-recognition, or non-registration poses problems in the effective functioning of trade unions, they have largely been successful, especially in the unorganized sector. Furthermore, with trade unions growing in the tech sector in states like Karnataka, Tamil Nadu, West Bengal, Kerala, and Maharashtra, the trade union movement is certainly growing. With changes such as trade union negotiation and their recognition, the streamlining of the grievance redress process in the newly introduced Industrial Relations Code, 2020, the significance and role of trade unions will certainly continue.